Question

ExpenseYearty costor rateGasInsurance$425.00$400,00$110.00$100.00What is the cost permile over the course ofa year for a $20,000 carthat depreciates 20%,with costs shown in thetable, and that hasbeen driven for 10,000miles?OilRegistrationDepreciation20%A $1.10 per mileB, SA. 10 per mileD. $0.50 per mileC. $0.25 per mile

Answer 1

First, we will find 20% of the cost of the car which is $20,000.

Thus, we have:

`\begin{gathered} 20\text{\% of 20,000} \\ \Rightarrow(20)/(100)*20000 \\ \Rightarrow\text{ \$4000} \end{gathered}`

Adding the $4000 to the other expenses provided in the table:

`4000+425+400+110+100=\text{ \$5035}`

To get the cost per mile, we are going to divide the total cost of $5035 by the number of mies, 10,000.

Thus, we have:

`(5035)/(10000)=\text{ \$0.50 per mile}`

Hence, the correct option is Option D